(2) In lieu of any taxes for which a property is granted exemption under this section, the owners of projects that exceed twelve (12) units shall agree to make payments to any county, municipality, metropolitan government, or district for improvements, facilities or services rendered by the county, municipality, metropolitan government or district. In no event shall such payments exceed the estimated cost to provide improvements, facilities, or services so furnished, and in no event shall such payments be required from public housing authorities operating under title 13, chapter 20. Such payment shall not be required from any project occupied prior to January 1, 1990, unless such project was the subject of a pending claim for tax exempt status before the state board of equalization on January 1, 1990. In the latter case, annual payments begun prior to April 30, 1990, shall continue to be made until the project and the recipients of the payments agree to discontinue or revise the payments. Nothing in this section shall be construed to negate any valid agreements concerning payments in lieu of taxes entered into prior to April 30, 1990.
(b) To qualify for such exemption, any such not-for-profit corporation must first be exempt from federal income taxation by virtue of qualifying as an exempt charitable organization or as an exempt social welfare organization under the provisions of the Internal Revenue Code, compiled in U.S.C., title 26, and any amendments thereto. In addition, the not-for-profit corporation shall have charter provisions providing in substance that:
(1) The directors and officers shall serve without compensation;
(2) The corporation is irrevocably dedicated to and operated exclusively for not-for-profit purposes;
(3) No part of the income or assets of the corporation shall be distributed to nor inure to the benefit of any individual;
(4) In the event of dissolution of the corporation or other liquidation of its assets, the corporation's property shall not be conveyed to any individual for less than the fair-market value of such property; and
(5) All assets remaining after payment of the corporation's debts shall be conveyed or distributed only to an organization or organizations created and operated for not-for-profit purposes similar to those of the corporation.
(c) All claims for exemption under this section are subject to the provisions of § 67-5-212(b).
(d) Subject to the general requirements of this section for exemption of federally assisted housing, there shall also be exempted under this section those properties owned by not-for-profit organizations and funded under the HOME Investment Partnerships Program, compiled in 42 U.S.C. § 12701, et seq., or the state-funded Housing Opportunities Using State Encouragement (HOUSE) Program. To qualify, the property must be used for permanent housing for low income or very low income elderly, disabled or handicapped persons.
(e) Nothing in this section shall be construed to preclude the application of § 67-5-212 to transitional or temporary housing that qualifies as a charitable use of property under that section.
History: [Acts 1973, ch. 226, § 5; 1975, ch. 168, § 1; 1975, ch. 323, § 1; 1983, ch. 122, §§ 1-3; T.C.A., § 67-509; Acts 1988, ch. 1002, §§ 1, 2; 1990, ch. 1009, §§ 1, 2; 1991, ch. 399, § 1; 1992, ch. 652, §§ 1, 2; 1993, ch. 454, §§ 1-3; 1994, ch. 617, § 1; 1994, ch. 645, § 1; 1997, ch. 347, § 1; 2002, ch. 704, §§ 1-4; 2008, ch. 1104, § 1; 2009, ch. 111, §§ 1, 2.]